Sunday, September 17, 2017

Amancio
Ortega is a founing chairman of Inditex fashion group. He looks
after more than 6000 stores in 88 countries. He is most famous for creating
ZARA, the retailer.

ZARA chain uses the just in time(JIT) method of
production. In JIT inventory is kept to minimum. The basic assumption of JIT is
that inventory is a liability rather than an asset and therefore, should be
kept to minimum. Resultantly, capital invested in inventory can be directed to
other uses. With less capital tied up in inventory the return on investment can
be enhanced.

Most people, in management, think JIT as only
inventory management technique rather than as a way of thinking to solve
problems. With reduced inventory level, the focus is shifted towards quality
production.

With reduced level of inventory the risk of
obsolescence is reduced. The cost on storage can also be saved.

Manufacturing executive understands the
importance of JIT but think that their operations are not fit to make
transition over to JIT.Many successful companies are using JIT. A list
of companies using JIT includes names like NIKE, Toyata, Hawlette Packard etc.
Infact, JIT was born in Toyata. Although it failed initially in Toyota
because its geographical disperse.

Later on it was adopted by other automobile
manufacturers. Today it is being used in many of top companies in industries as
diverse as computer industry to fashion.

The biggest impact of JIT is not on inventory
and ROI but the way it exposes problems in supply chain, which needs to be
resolved. And this is where executive think JIT can be hurdle rather than
support.

As with other techniques, JIT has its own set
of flaws. The reduced level of inventory increases the risk associated with
supplier’s failure. Toyota lost billions when plant of one of its supplier
caught fire.

Suppliers are the most important piece in
JIT. For succeeding in JIT you need to have reliable suppliers, who can
supply you quality product without delay. A supplier than would ask for a bit
more money to compensate for the added reliability.

JIT, for its profitable implementation needs to
have some prerequisites. A company can only make transition over to JIT if its
cost of storage increases sharply with increase in inventory. Moreover,
ordering cost should be negligible.

Generally companies starts to implement JIT
from suppliers. Sooner they get fed up with unavailability of JIT suppliers,
the one who is willing and able to supply right thing, at the right time, and
in right quantity. It is advisable for these companies to start implementing
JIT from assembly level to backward the supply chain. Rather than having ready
prepared finished goods, they should assembly their products when ordered by
customer. Gradually, workers would start having components in easy to assemble
form.

Wednesday, June 28, 2017

Luxembourg is
a heaven for workers, the country where an average worker works only 28 hours
in week. The under-worked employees are not problem for employers as well
because the worker produces much more in an hour than many, in other countries,
would have produced in 3 hours.

The phenomenon
of reducing number of hours worked with enhanced productivity isn’t uncommon in
other countries. France where average work week consists of 28.2 hours produces
65.6$ worth of value per hour per worker.

United
States, the most developed economy, gets 68.3$ from their worker per hour
during its 33.6 hour work-week.

The finding
of a recent study confirmed economist’s preposition, that long work-weeks are counterproductive.
The evidence produced suggests that long hours cause a decrease in creativity.

The curve of
productivity shifts towards bottom as it moves towards right. Research, at Svartedalens
retirement home, shows that shorter work-weeks can increase productivity among
nurses. Side benefits include increased happiness and job satisfaction.
Svartedalens is a growing movement in Europe asking for reduced number of work
hours.

Eight hour
work day is a norm across the world. Ford Motor Company, in the days of ‘sun up to
sun down’ workday, was the first business to implement 8 hour work week. Within
two years Ford’s profits doubled encouraging other businesses to follow suit.

These days
the nature of employment has changed from physically demanding to mentally
demanding. The time boundary of on work and off work has become blurring. Many
employees say they found solution to an important problem, at work, during
vacation. The modern day jobs demand that a worker brings in more mental
energy.

Fresh mind
is more creative and therefore more productive during the present economic
times. Shorter hours can keep your mind fresh and can save your employer in
sick leaves as well.

Friday, April 28, 2017

Albert Gubay,
the late billionaire, from humble beginning established United Kingdom’s most
successful supermarket chain Kwik Save.

It started, in 1959, when he founded value
foods. His aggressive price cuttings lead many distributors and suppliers to
refuse him.

In 1964, he
visited United States learning from there a technique which helped him built
his retailing chain. Sooner his Value Foods changed to Kwik Save, a discount retailer
chain boosting more than 1000 stores. The growth of his business was a direct
result of his use of baby shark method.

In this
method the retailer purchases goods on good payment terms, say for example, 60
or 90 days and then sell these items at or below costs. The interest on cash
generated by the sale is then used to expand retailing business.

The interest
on trade credit is received in form of discount. By selling these items he generated
cash for expansion at the same time being able to pay suppliers when the
payments became due. This method is a sort of OPM, other people’s money.

The use of
baby shark method, along with other cost cutting methods learnt from West
German retailing giant ALDI, he founded the empire consisting of hundreds of
outlets. In 1973, he sold Kwik Save for £14 million, the first step to amass
his £500 million fortune.

ALDI, the giant
German retailer was using this method much before Gubay copied it. In fact,
ALDI was where this method of retailing was perfected. Today ALDI owns more
than 10000 stores in 18 countries, with total turnover of 50 billion €.

Wednesday, April 5, 2017

Since the
time of Greek thinkers man is searching for ways to study and memorize
effectively. Now a team of researchers led by John Dunlosky has unveiled number
of ways in which educators can enhance the effectiveness of learning for their
students. Moreover, teaching these strategies to students can also help saving
the cost on education and save you from becoming the next target of PEEDA
(Punjab employees’ efficiency, discipline and accountability) act.

Surprisingly
the most popular methods of study are least effective. Most popular ways are
highlighting, rereading, rot learning, and massed practice.

These methods can help enhance students understanding and ability to apply learned concepts

The most effective
ways found are :-

Testing and distributed practice

Tests are
termed as necessary evil of our education system but the research showed that
testing is a very good way to learn. Teachers can make testing less threatening
for students by making them less dramatic and more frequent. Giving weight age to class tests and quizzes
in examination is a good way to make tests fun and less threatening.

Another effective strategy is
distributive practicing

Unlike
Massed practice, which is done multiple times before moving to the next lesson,
distributive practice is spreading your practice over a period of time. This distributive practice is very effective.

Other promising
strategies to learn but enough research have not been done yet are:-

Interleaved practice

Interleaved
practice goes one step forward then distributive practice. It is like
distributive practice spread over a period of time but this also involves mixing
practice of different materials, in a single study session. This can produce
good results if already acquired level of expertise in a given subject matter
is of high degree.

Elaborative interrogation and self
explanation

Elaborative
interrogation is trying to explain why some given fact is true. While self
explanation is trying to explain how the given information is related to the
previous learned information.

Less useful
strategies are rereading, summarizing, highlighting, keyword mnemonics, imagery
for text are some of the least effective strategies. Although summarization can
be helpful in some cases but it needs time to learn hence making it less time
and cost effective.

Thursday, March 16, 2017

European
researchers on Tuesday announced the development of Superconducting tapes. The
statement said that the breakthrough could one day revolutionize the power
transmission and power generation industries. The statement went as far as to
claim that the technology is already being used in many appliances.

Eurotapes, a
European research project on superconductivity has produced 600 meters
superconducting tape, said the coordinator of the project, Xavier Obradors, of
the Institute of Materials Science of Barcelona.

Superconductivity
is a phenomenon discovered in 1911 by Heike Kamerlingh Onnes. Superconductivity
is the ability of any material to conduct electricity with zero loss of
electric charge. Conventional conductors like copper losses up to 10% of the
charge in form of heat.

All
superconducting materials discovered till now show their superconductive
property at low temperature. The highest temperature known
superconducting material is highly
pressurizedhydrogen
sulfide, whose critical temperature reaches
203 K (−70 °C), the highest accepted superconducting critical
temperature as of 2015. The aim is to one day find a material that can work as
superconductor at room temperature.

The use of
superconductor, if any discovered to work at room temperature, can
revolutionize the power distribution, power generation and electric appliances.
The use of the material in appliances and other electronics would help
manufacture of supercomputers, much lighter and cheaper than today. The power
generation can be revolutionized by manufacture of much lighter and much more
efficient wind turbines. It can convert small wind turbines into an electricity
generation power house.

Wind
turbines are a series of wire coils attached to the rotor blade spin in the
presence of strong magnetic fields, provided by stationary magnets. Making the coils from resistance free material
can boost power generation.

The power distribution
can be changed altogether. Right now, if you want to send electricity from the
East coast of the US to the West coast, you could lose at least 60 percent of
the energy because of the resistance within the wires. Imagine the superconducting
transmission lines carrying charge from Gobi desert in China to London, without
any line losses. The solar panels near the equator can be linked to
transmission lines helping better and much more efficient energy mix in favor
of renewable energy as at all time there will be sun shining somewhere.

The
discovery can one day lead to environment friendly power generation and power
consumption. The race to develop first superconducting material at room
temperature is yet to yield any viable results. The team in United States has announced
the production of metallic hydrogen, a possible superconductor at room
temperature, through application of pressure much more than at the center of
Earth.

Australian researchers
earlier mentioned that wind turbines two to three times more efficient than
present ones can be manufactured using superconductors and would be ready to be
installed on Australian shores till 2019.

Japanese
team has hinted that they have discovered that critical temperature of
materials can be enhanced by soaking materials in red wine.

Superconductivity
research can one day free us from dependence on fossil fuel and make Earth a
better place to live in for our children.

Monday, March 6, 2017

Assets of Islamic banks have doubled in the last four years and SECP is
now considering amending laws and giving tax relief to enable them to issue sukkuk
bonds and real estate investment trust.

“The assets in Islamic banking (in Pakistan) have doubled, jumping from
Rs837 billion to Rs1.6 trillion, from 2012 to 2016, now accounting for 11.7% of
the total banking assets,” said Securities and Exchange Commission of Pakistan
(SECP) in a handout on Saturday.

Non-banking financial institutions (NBFI) enjoy more support in religious
classes of the country than Islamic banks. This is evidenced by stronger growth
of assets in Sharia-compliant NBFI. The market share of assets in Islamic NBFI
has grown from 14%, in 2002, to 33% now.

“The SECP has recently conducted
two consultation sessions with market participants to facilitate issuance of
sukuk and real estate investment trust (REIT),” said Usman Hayat, head of the
Islamic Finance Department at the SECP.

“The SECP is analyzing industry proposals and it shall consider making
appropriate amendments to the relevant regulations, further reducing the cost
and hassle for both issuers and investors. The industry proposals pertaining to
tax issues regarding sukuk and REIT are being referred to the FBR,” he added.

At present 21 banking organizations are offering Islamic banking services
in the country through 2,322 branches in 112 districts across the
country. “The SBP has a holistic approach to the promotion of Islamic
banking and is providing enabling policy environment, Sharia governance, risk
management, and capacity building,” says Ghulam Muhammad Abbasi, head of the
Islamic Banking Department at SBP.

The assets of Islamic financial institutions are growing at a rapid pace but
it is yet to be seen as how Islamic is the Islamic finance.

Thursday, March 2, 2017

Pakistan is
a cricket loving nation. The cricket matches between Pakistan and India are
biggest sports event and therefore good business opportunity for sponsors.

Pakistanis
use to spend a lot of time on watching the game as it is long game unlike
football.

Pakistan
Cricket Board in its effort to reintroduce international cricket in Pakistan,
established Pakistan Super League (PSL). PSL is a single entity and has five
cricket teams as its franchises. The commercial rights to the initial
franchises were sold for PKR 9.85 billion ( 91.4 million $) for a span of 10
years in December 2015. The first session, held in 2016, yielded 2.6 million $
in profit.

Owners of
these teams are:-

Karachi Kings is owned by ARY Media Group. ARY Media
Group is owned by Salman Iqbal, whose
net income for year is 90 million$.1 Karachi King was sold to ARY
Media Group for a period of 10 years, from December 2015, for 26 million$, thus
making it the most expensive PSL team.

Lahore Qalandars are owned by Qatar Lubricants Company
limited (QALCO). QALCO is the only state-of-the-art lubricants blending plant
in Qatar. This company is headed by Rana Fawad. It is the second most expensive
team after Karachi Kings and was priced at 24 million $ in December 2015.

Peshawar Zalmi was sold to Haier Paksitan for 10
year period against 16 million US dollars. Javed Afridi is the CEO of Haier
Pakistan. Haier Pakistan is subsidiary of Haier Group Corporation based in
China.

Quetta Gladiators is owned by Omar Associates, a
Karachi based company. The company was founded in 1969. Nadeem Omar is
presently the CEO of the company. The group was basically a construction
company but now the group is planning to enter into mining sector. The group
acquired the franchise for 11 million$.

Islalmabad United Leonine Global Sports won the bid for
franchise rights of Islamabad United for a decade against 15 million$. Leonine
Global Sports is owned by venture capital firm Leonine Global which is based in
UAE. The sports entity Leonine Global Sports also owns a franchise team in Hong
Kong T20 League. The venture capital firm is owned by Ali Naqvi. Ali Naqvi is a renowned businessman having
business interests in different countries.